Toyota Parks Corolla Hybrid in Key Market Space

It looks like hybrid cars aren’t going to be a rare subspecies with a narrow market niche anymore. Now, the world’s best-selling car will come in a hybrid model too.

Bloomberg News

The Toyota Motor Corp. Corolla Axio Hybrid vehicle is displayed at its unveiling in Tokyo on Aug. 6.

Toyota Motor Corp. said Tuesday its best-selling Corolla will now be available as a hybrid in Japan, where demand is growing for a wider variety of vehicles that run on both gasoline and electricity. Hybrids accounted for about 20% of vehicles sold in Japan last year.

Toyota has no plans to sell the Corolla hybrid overseas at the moment.

The car is part of Toyota’s plan to offer 21 hybrid models over three years through the end of 2015 to solidify its position as the hybrid leader.

The Corolla will join six hybrid models already on the market. A hybrid Highlander sport-utility vehicle will come off the lot in early 2014.

Toyota has already established itself as the maker of the world’s first mass-produced hybrid, the Prius. In terms of price and model, the electrified Corolla will fill the gap between the two best-sellers–the Aqua compact, known as the Prius C overseas, and the Prius hatchback.

The new Corolla would be best-suited for those looking for a sedan-style hybrid bigger than the Aqua, Corolla’s chief hybrid engineer Hiroshi Nakamura told reporters at a briefing.

While competitors like Ford Motor Co. and Honda Motor Co. are nipping at Toyota’s heels with their latest fuel-efficiency systems, the new Corolla has no major hybrid rival since Honda discontinued its Civic hybrid in Japan three years ago.

The new Corolla is timely too, with gasoline prices at their highest in nearly five years. It runs 33.0 kilometers on a liter, a little less than the Aqua’s 35.4 km, but better than the Prius’s 32.6 km.

The lowest price of Y1.925 million ($19,650) is below the Prius’ Y2.17 million. Aqua’s lowest price is Y1.69 million.

Yet Toyota has set its monthly sales target surprisingly low, aiming to sell only 2,500 Corolla hybrids a month, including the station-wagon model. That compares with 10,000 a month for the Prius, and 12,000 for the Aqua.

“Of course, we hope to sell more than the target, or even beat the Prius,” Mr. Nakamura said without elaborating.

The Corolla hybrid is 50% more fuel efficient than the gasoline version, but about Y400,000 more expensive. The Prius and the Aqua are hybrid-exclusive models. Mr. Nakamura said the higher costs for the hybrid Corolla may weigh on purchasing decisions.

“It might be hard” for some drivers to recoup their costs quickly, he said.

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